Bitcoin Tumbles as Fear & Greed Index Hits Lowest Since $17K: Analysts Weigh In

Last updated: July 9, 2024

Bitcoin on a black surfaceThe Crypto Fear & Greed Index, a favored contrarian indicator, has plunged to its lowest point since Bitcoin traded at $17K in early 2023.

Analysts warn of potential further downside, with significant selling pressure looming from multiple fronts.

What happened?

Investor sentiment has hit rock bottom, reminiscent of the late 2022 crypto winter, as Bitcoin’s fall below $54,000 drags down digital asset markets.

The Crypto Fear & Greed Index, created by, dropped to 29 on Friday, signaling deep fear. This marks its lowest dive since January 2023, when Bitcoin hovered around $17,000 following a brutal bear market.

The downturn is fueled by the German and U.S. governments offloading seized BTC, along with sell pressure from Mt. Gox user refunds. Rachel Lin, CEO and co-founder of SynFutures, noted that these factors create a multibillion-dollar overhang.

The German government holds $2.2 billion worth of BTC, the U.S. government over $12 billion, and the Mt. Gox estate more than $8 billion, according to Arkham Intelligence.

Markus Thielen of 10x Research sees Bitcoin potentially sinking to $50,000 during historically weak months ahead. However, a Fed interest rate cut in September could spark a rally. Thielen has trimmed his price target from $55,000 to $50,000, noting that ETF holders and miners might liquidate more positions in challenging months like August and September.

While extreme fear often presents buying opportunities, the current scenario is complex. Lin suggests that Bitcoin’s direction will largely depend on Mt. Gox user actions. If sell-offs are less intense than expected, a bounce back is possible. Conversely, significant selling could push Bitcoin towards the $50,000 mark.

Despite these headwinds, some analysts, like Wedbush’s Dan Ives, highlight the long-term potential driven by Bitcoin’s AI capabilities and data-driven strategy. The market remains watchful as sentiment teeters between fear and optimism.

Bitcoin closed at $246.39 on Wednesday, up 6.54%, with continued gains in after-hours trading. Year to date, Bitcoin is down 0.82%, according to Benzinga Pro.

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